Financial Services Platform SoFi Plans IPO Via SPAC

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Silicon Valley startup Social Finance (SoFi) is closing a merger deal with blank-check firm Social Capital Hedosophia Holdings Corp. V to file an initial public offering (IPO).

“SoFi is on a mission to help people achieve financial independence to realize their ambitions. Our ecosystem of products, rewards and membership benefits all work together to help our members get their money right,” SoFi CEO Anthony Noto said in a press release on Thursday (Jan. 7).

Social Capital Hedosophia is one of three special-purpose acquisition companies (SPACs) on the lookout for investment opportunities. The deal would give SoFi a post-money valuation in excess of $8.65 billion, with the goal of bringing FinTech businesses to public markets. The deal is anticipated to provide as much as $2.4 billion in cash proceeds.

SoFi’s technology platform Galileo, which it acquired in April, has helped position the startup at the nexus of the digital transformation in banking and financial services.

“SoFi’s innovative, member-first platform has demystified financial services for millions of Americans and simplified the process for those looking to apply for loans, invest their money, obtain insurance and refinance their debt, among many other tasks that were previously arcane and needlessly complicated,” said Chamath Palihapitiya, co-founder and CEO of Social Capital Hedosophia V.

Palihapitiya added that SoFi members have advanced a “virtuous cycle of compounding growth,” which also led to profits and varied revenue streams.

SoFi partnered with Samsung and Mastercard to launch a new cash management account feature with no fees. Users of Samsung’s Money by SoFi will be able to tap discounts for a variety of Samsung products, from Galaxy smartphones to washers, refrigerators and more.

Noto — formerly an investment banker with Goldman Sachs — has expressed wanting to go public via a SPAC. Founded in 2011, SoFi has worked to leverage lending after the 2008 financial crisis, focusing on student loan refinancing.

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